Tag: whistleblower protection policy

A good whistleblower protection policy helps make it possible to discover fraud.

Without a good whistleblower protection policy, it’s a lot harder for the federal government to find people willing to help discover and prosecute fraud. Yes, there are financial incentives to encourage people to step forward and stop the fraud. However, these monetary rewards aren’t always enough.

What’s Stopping a Potential Whistleblower?

It’s not easy to be a whistleblower under the False Claims Act. Theoretically, an individual can serve as a whistleblower by sending an anonymous email. Or they can make a telephone call that brings the fraud to the attention of the federal government. But to prosecute the people responsible, the whistleblower almost always has to provide more information, including their identity.

A whistleblower revealing who they are can pose a serious problem. That’s because it can subject them to revenge or retaliation by anyone who might commit fraud against the federal government. One way to persuade potential whistleblowers to step forward is to provide them with a financial reward. But sometimes that’s not enough.

Why Isn’t a Monetary Reward Enough for Whistleblowers?

Even when a whistleblower (the technical term is a “relator” in a qui tam legal action) cooperates to the best of his or her ability, that doesn’t guarantee a sizable financial reward. The federal government might believe that the whistleblower didn’t do everything he or she could. Or maybe the whistleblower gets a financial reward, but it is much less than expected.

For example, let’s say a court believes the relator took part in the fraud. They might lower the financial reward to only 10 percent of the amount recovered. This is much lower than the 30 percent that is sometimes possible.

Another way the relator gets less money is if the federal government isn’t able to recover as much money as planned. Perhaps the fraudster stole $100 million. But for whatever reason, the relator could only convince the court that the fraudster took $10 million. Even if the relator receives the highest percentage reward possible of about 30 percent, $3 million is a lot less than $30 million.

Therefore, to further convince potential whistleblowers to step forward, there are special protections set in place by the False Claims Act.

False Claims Act Protection #1: Secrecy

The easiest way to avoid revenge from coworkers or bosses is to keep them from ever knowing who the whistleblower is. When first blowing the whistle, the whistleblower can usually keep their identity a secret. They can report the fraud anonymously. Eventually, they have to reveal who they are to the federal government. However, the government is usually pretty good about keeping the whistleblower’s identity a secret.

Things get a bit riskier if the whistleblower decides they want a financial reward.

This requires them to begin a qui tam action and serve as a relator. During the initial stages of litigation, the whistleblower is safe. This is because the complaint in a qui tam is “under seal.” That’s just a fancy legal term for keeping it secret. It also means the fraudster does not find out about the qui tam action until later on in the case. If the fraudster doesn’t know someone tipped off the federal government, it’s hard for them to retaliate.

The purpose of this secrecy is to allow the government time to investigate the alleged fraud.

The secrecy period lasts for at least 60 days. But it will often last longer because the federal government needs more time to investigate the scam. And it’s pretty easy for the government to ask and obtain an extension.

But eventually, the investigation ends and the court removes the “under seal” case status. The fraudster is now likely to discover who the whistleblower is. They might retaliate against them. But sometimes, the fraudster can figure out ahead of time who the whistleblower is. Luckily, there are special anti-retaliation protections in place.

False Claims Act Protection #2: Prohibition on Retaliation

It is illegal for an employer to harass, bully, fire, threaten or otherwise retaliate against a whistleblower. If the employer retaliates, then they may have to reinstate the whistleblower and pay damages. They include back pay, attorney’s fees and interest.

This sounds great, and it is, in theory. But the reality is not as great because it’s not always easy to prove retaliation. A clever employer can disguise a retaliatory firing. They can make up performance-related reason that has nothing to do with whistleblowing.

Another problem is that even if the employee wins his or her retaliation case, do they really want to go back to the same job? The monetary damages they receive are usually not enough to make it worth the hassle or aggravation of retaliation.

Despite its drawbacks, the anti-retaliation provisions of the False Claims Act are better than nothing. They can alleviate some of the pain of being a whistleblower or prevent retaliation from taking place.